Someone asked me why I am not attacking the Alward government’s job creation record over its first year in office. If you have been reading the blog, you probably know the answer but just in case here is the thumbnail sketch.
I was wary of Bernard Lord’s approach to economic development from the 1999 election campaign where he criticized McKenna’s call centres and called for a ‘made in New Brunswick’ solution. The reality is that Premier Lord took office in the middle of the longest period of sustained economic and population growth in Canadian history. Public spending was just starting to ramp up again in a big way and those pesky call centres were continuing to create hundreds of new jobs per year (more call centre jobs were created under Lord than McKenna). In my view, 1999 was a golden opportunity to get serious about economic development and, in my view, Premier Lord did very little. He cut small business taxes and took credit for several thousand call centre jobs. He launched initiatives such as eNB and the R&D initiative (we were to reach the top four in Canada for R&D among the provinces – we are still last) but didn’t put any real effort into them.
Premier Graham made a number of positive overtures early on in his term but in 2007 was hit by the Great Recession and he implemented a big fiscal stimulus program which distorted the private sector economic development picture. All that increased public sector made it look like NB was holding its own. In the end, there were no new initiatives of note or efforts leading to increased private sector investment in any sector. They were counting on the energy hub but that didn’t work out. A few other large capital projects – Lepreau refurb, potash, LNG also propped up construction employment.
So that brings us to Premier Alward who landed in office with continued softness in the U.S. market, projects such as potash and Lepreau winding up, the high value of the Canadian dollar, a contracting call centre industry and the need to take the foot off the public spending spree that had marked the previous two budgets. It doesn’t take a rocket scientist to see these factors would lead to trouble in the labour market.
So, if anything, I feel for the Premier and his team these days. However, the clock is ticking and we will need to see what the plan is to foster economic development moving forward. Don’t forget it was in the middle of the fiscal troubles of the early 1990s that the call centre initiative emerged.
We are going to need that again. Maybe it will be shale gas, maybe cloud computing, maybe something else – likely a combination of sectors but we need to craft the value proposition and position the province for investment.
For me the policy moves over the next few months are more important to me than the employment numbers.